The American labor market has experienced dramatic changes since the start of the global COVID-19 pandemic in the early spring of 2020, with historic job losses followed by a sharp employment recovery. Since 2021, the pandemic labor market has entered a third phase, with a dramatic reshuffling of workers in the labor market. Commonly referred to as the “Great Resignation,” workers have left their jobs at extraordinary rates, particularly younger workers. While some argue that young workers left their jobs to rely on the federal stimulus money or other forms of public assistance, others believe that young workers left their current jobs for ones with better pay, benefits, or other working conditions.
Are workers quitting because they do not want to work, or because they want to find better work? Using data from the Shift Project collected between Spring 2020 and Spring 2022, we test these competing narratives of the Great Resignation by directly examining workers’ jobs and job leaving during this period.
Younger workers (ages 18 to 24) often faced challenging job conditions in the form of low pay, unpredictable schedules, and limited benefits, but these circumstances varied substantially between jobs and employers. This variation in job quality made a significant difference in job satisfaction and retention intentions. Across most measures, poorer baseline job quality is significantly associated with greater job dissatisfaction and higher likelihood to seek a new job for young workers.
Beyond workers’ stated intentions, we can also examine which workers did, in fact, leave their jobs, and how their job exits were associated with the quality of their baseline jobs. Using detailed longitudinal data that tracks younger workers from the Spring of 2021 to the Spring of 2022, we find that workers who began in the most precarious jobs were much more likely to exit their jobs than workers with higher baseline job quality (e.g., better wages, more stable schedules).
By using the Shift panel data which tracks workers over time, in addition to knowing which workers left their job, we also observe the employment trajectories of workers who left their jobs. This allows us to test whether workers are using job leaving as a way to “upgrade” their jobs or are simply leaving employment. In total, 49% of young workers stayed at their job, while 39% of workers left for a new job and only 12% transitioned to unemployment, most of whom were actively looking for work, were in school, or were providing care. Less than 1% of younger workers were sitting out of the labor market because they didn’t need to work.
Rather than large shares of workers leaving the ranks of the employed, the far more common outcome was to either stay put in their job or to move from one job to a new position. And, focusing exclusively on those who moved to a new job (i.e., excluding those who transitioned to unemployment), we find strong evidence that young workers who moved jobs were able to upgrade to higher wages and more stable schedules.
Our results suggest that young workers in the service sector seized the opportunities provided by a pandemic and an extremely tight labor market to improve their working conditions. Rather than being trapped in jobs with low pay or unstable schedules, these workers sought out roles that were a better fit for their own personal and professional goals.
If you want to learn more, read the Annie E. Casey Foundation’s blog on this report.